Retooling for Growth

Retooling for Growth: Building a 21st Century Economy in America's Older Industrial Areas

Richard M. McGahey
Jennifer S. Vey
Copyright Date: 2008
Pages: 437
  • Cite this Item
  • Book Info
    Retooling for Growth
    Book Description:

    Slow job growth, declining home values, a diminishing tax base, and concentrated poverty are but a few of the growing obstacles for well-established but struggling cities. Challenged by decades of globalization, technological change, and dramatic demographic shifts away from the urban core, these former industrial powerhouses, particularly in the Northeast and Midwest, have been eclipsed by burgeoning American cities with a viable niche in the new economy. In Retooling for Growth,experts present new frameworks, cutting-edge analysis, and innovative policy solutions for the nation's government, business, civic, and community leaders to sculpt a sustainable and supportable economy for older industrial areas. The unique focus on rehabilitating weak market cities outlines ideas for reshaping the role of public agencies, the workforce, business organizations, and technology. Implementation of these measures addresses challenges such as fostering entrepreneurship, reducing poverty and inequality, and maintaining and augmenting the number of skilled professionals who reside and work in a community, among others. This collection of essays offers practical, achievable strategies for revitalizing industrial areas and building upon the potential of existing but overlooked resources of economic, physical, and cultural significance. In this important volume, leading authorities provide a thought-provoking analysis of healthy economic development practices for both public and private sectors.

    eISBN: 978-0-8157-5557-9
    Subjects: Political Science

Table of Contents

  1. Front Matter
    (pp. i-iv)
  2. Table of Contents
    (pp. v-viii)
  3. Foreword
    (pp. ix-xii)
    Edward G. Rendell and Kenneth D. Lewis

    America is a nation of cities and towns: 80 percent of Americans live in or around cities. The past 15 years have been good ones for most of America’s cities. Population is growing, crime is down, and livability is up. But many of the nation’s cities are struggling to find their place in the new global economy. Most are communities that thrived during the Industrial Revolution in the late 19th century and the first half of the 20th century—Pittsburgh, the former steel capital of the world; Detroit, the former Motor City; Cleveland, once an industrial giant; and dozens of...

  4. Preface
    (pp. xiii-xvi)
    David H. Mortimer
  5. PART ONE Frameworks

    • 1 Regional Economic Development in Theory and Practice
      (pp. 3-32)
      Richard M. McGahey

      Although the American economy has entered the sixth year of the current expansion, job growth during the current recovery is significantly slower than in the past. On a peak-to-peak basis, most indicators for the current recovery lag behind the postwar average—GDP growth is 2.6 percent, compared to a postwar average 3.3 percent gain; wages and salaries are 1.2 percent higher, compared to a postwar average of 2.8 percent; and employment is up only 0.6 percent, compared to a postwar average of 1.7 percent.¹ And there is a marked slowdown since 2003. Between 2003 and the first half of 2007,...

    • 2 Revitalizing America’s Older Industrial Cities: A State Agenda for Change
      (pp. 33-60)
      Jennifer S. Vey

      Take a walk around any number of U.S. central cities, and you’ll have a keen sense that the nation is in the midst of an urban renaissance. Employment is up, populations are growing, and many urban real estate markets are hotter than ever, with increasing numbers of young adults, immigrants, and empty-nesters reenergizing downtowns and neighborhoods that had long been in decline.¹

      Unfortunately, not all cities are fully participating in this resurgence. Throughout the country—and particularly in the Northeast and Midwest—a large number of older industrial communities are still struggling to make a successful transition from an economy...

    • 3 The Talent Imperative for Older Industrial Areas
      (pp. 61-88)
      Randall Kempner

      In 2005, the Council on Competitiveness released its seminal report, “Innovate America: Thriving in a World of Challenge and Change,” on what the United States must do to maintain its place as the most competitive country in the world. In “Innovate America,” developed with the input of over four hundred academics, business leaders, and public policymakers, the Council lays out three broad areas of focus for the country: investment, infrastructure, and talent. Specifically, the Council identifies talent as the most important pillar that supports our national economic competitiveness. This call to action recognizes a fundamental shift in the basis of...

    • 4 Been Down So Long: Weak-Market Cities and Regional Equity
      (pp. 89-118)
      Manuel Pastor and Chris Benner

      Traditional economic theory and standard economic development practice have tended to pose a contradiction or trade-off between efficiency and equity: what is good for one may be bad for another. The trade-off would seem to be particularly acute for cities and regions with weak economies: surely they cannot afford to pay excessive attention to issues of fairness and inclusion lest this take the eyes off the central prize of restoring competitiveness and promoting growth.

      In this chapter we argue the opposite. We stress that pursuing equity is not at odds with a concerted effort to strengthen economically distressed cities; indeed,...

    • 5 Effective Chambers of Commerce: A Key to Regional Economic Prosperity
      (pp. 119-148)
      Stephen Moret, Mick Fleming and Pauline O. Hovey

      “Human prosperity does not abide long in one place.” Herodotus’ observation in the fifth century B.C. should serve as a reminder to high-growth regions about the frailty of their wealth, as well as confirmation that weaker marketscancome back. Whether they serve in growth regions or struggling communities, public and private sector leaders who seek sustainable prosperity must attend to the fundamentals that can improve the likelihood of economic success.

      Other chapters in this volume highlight the causes and extent of the current disparity between regions. Market forces will, for the most part, determine levels of success in sectors,...

  6. PART TWO Analytics

    • 6 Understanding Economically Distressed Cities
      (pp. 151-178)
      Harold L. Wolman, Edward W. Hill, Pamela Blumenthal and Kimberly Furdell

      Even though American cities as a whole have been gaining jobs and residents over the past two decades, numerous cities continue to have serious economic problems.¹ These cities, many of which have a manufacturing legacy, have been unable to make the adjustments necessary to meet the challenge of changing economic circumstances. They have suffered economic and population decline or stagnation, and their residents, on average, have had little or no improvement in their standard of living. Understanding the nature and causes of this economic distress, and both the potential and limitations of public policy in addressing it, is essential for...

    • 7 Placing Labor Center-Stage in Industrial City Revitalization
      (pp. 179-210)
      Ann Markusen and Greg Schrock

      Many U.S. cities, especially those with venerable industrial traditions, have had a difficult time recovering from accelerated world market integration and structural change in particular sectors. They have struggled to retain existing industries and firms and attract new ones. They have experimented with new ways to retrain the resident labor force for new and existing lines of work. They have hired more professionals to pursue economic development strategies. And they have spent considerable resources doing these things, with quite mixed success.

      Part of the problem is the continued reliance on old ideas of how development happens and whom and what...

    • 8 Occupational Clusters, Employment, and Opportunity for Low-Skilled Workers
      (pp. 211-248)
      Mark Turner, Laurel Davis and Andres Cruz

      Low-skilled workers vying for employment in the U.S. job market face many challenges in today’s global economy. Manufacturing jobs and, increasingly, skilled occupations (such as accounting and software programming) are moving overseas, where labor costs are dramatically lower. Many service occupations, which have historically provided a strong job base, have become obsolete due to technological advancements and automation. As a result of these changes in the U.S. job market, there are fewer career paths left for low-skilled workers, who lack the education and training to compete against a growing pool of highly skilled yet underemployed and nonemployed citizens and immigrants....

    • 9 Manufacturing, Regional Prosperity, and Public Policy
      (pp. 249-274)
      Daniel Luria and Joel Rogers

      U.S. manufacturing employment declined 20 percent over the decade from 1998 to September 2007. Having peaked near 20 million in 1979, the number of manufacturing jobs has dropped to 14 million, its lowest level since the early 1950s, and as a share of national employment to barely 10 percent.¹ About 40 percent of this recent job loss was visited on the traditional northeastern and north-central “industrial heartland ”—Illinois, Indiana, Michigan, Ohio, Wisconsin, and the western parts of Pennsylvania and New York—which contains most of the “older industrial areas” that are the topic of this Assembly.²

      The broad relevance...

  7. PART THREE Policy and Practice

    • 10 What Makes a Good Economic Development Deal?
      (pp. 277-298)
      Rachel Weber

      After government officials diagnose a municipality with the serious ailment we call “decline,” they often prescribe the set of remedies known as “economic development incentives.” These incentives, which can take the form of property tax abatements, corporate income tax credits, sales tax rebates, tax increment financing (TIF) allocations, land write-down programs (public land sold below market value), and low-interest loans to businesses and developers, are meant to lure or retain private investment in declining areas and form the basis of the deals that are the backbone of local economic development policy. After several decades of dwindling assistance from the federal...

    • 11 The Reality of Economic Development in Older Industrial Cities: The Practitioner’s Perspective
      (pp. 299-324)
      Jeffrey A. Finkle, Shari Garmise and Shari Nourick

      The effects of globalization are far-reaching, and American cities are being restructured not only by technological changes but also by geographic shifts that have negatively affected many communities, especially older industrial cities. Restoring these older industrial cities to vibrant places to live and work in the twenty-first century requires the application of mechanisms that not only improve the physical landscape but will also facilitate the transformation to an innovative, knowledge-based economy.

      The job of economic development is a hard one. In the twenty-first century, economic development challenges have increased in scope and complexity. Practitioners working in a multidimensional, politically fragmented...

    • 12 Workforce Development Strategies for Older Industrial Cities: Toward a New Approach
      (pp. 325-350)
      Richard Kazis and Marlene Seltzer

      In today’s knowledge economy, U.S. cities are competing against each other and against cities around the world to attract employers, entrepreneurs, and skilled workers who will drive growth, development, and prosperity.¹ As the authors of the chapters in this volume emphasize, the new terms of competition have resulted in a reshuffling of the prospects of different cities: some have found ways to rise in this new environment, and some, primarily older industrial cities, frequently those with limited human capital-related assets, have fallen further behind. A number are in a spiral of declining population, employment, skills, and earnings, coupled with a...

    • 13 Promoting Inclusive Economic Renewal in Older Industrial Cities
      (pp. 351-372)
      Angela Glover Blackwell and Radhika Fox

      This is a moment of optimism for older industrial cities. Once iconic engines of productivity and manufacturing, then forgotten casualties of deindustrialization, these places are now poised to benefit from the renewed interest in urban America that has finally reached their borders after years of focus on “hot” cities such as San Francisco and Washington, D.C.¹

      But the renaissance of older industrial cities and their regions will prove shallow and unsustainable unless it is economically inclusive. Traditionally disadvantaged populations—low-income residents and people of color—must be brought into the economic mainstream so that they may contribute to and share...

    • 14 The Market-Building Potential of Development Finance in Older Industrial Cities
      (pp. 373-390)
      Jeremy Nowak

      There is a significant literature on capital investment in older industrial cities, including studies of mortgage investment, small business finance, microenterprise, and private equity. This literature discusses the challenge of capital access in those communities, public policy incentives designed to drive capital flows (particularly tax-based incentives), and the nonmarket constraints to development.

      This chapter explores the market-building role of development finance in older industrial cities. Bydevelopment financeI mean market-oriented capital that requires a return on investment but is willing to take nonmarket positions and risks due to its public purpose. It is capital that must be profitable but...

  8. APPENDIX Report of the 106th American Assembly
    (pp. 391-418)
  9. Contributors
    (pp. 419-420)
  10. Index
    (pp. 421-438)